The Coming Global Currency Shift

As renminbi internationalisation and financial reforms accelerate, the currency’s role in global reserve management should expand quickly

The rise of Chinese currency
The reforms finalised at China’s Third Plenum in November 2013 were the boldest package of policies seen in decades, indicating the new leaders’ determination to put the country on a new course. But subsequent concerns about shadow banking, local-government debt and possible defaults have made policymakers even more determined to speed up financial reforms.

    Beijing is already freeing up interest rates for foreign-currency deposits, easing restrictions on cross-border capital flows in the Shanghai free-trade zone, easing foreign investors’ access to Chinese markets and the daily trading band for the renminbi-dollar rate has now been doubled to + or -2%.

    China has a three-pronged approach to renminbi internationalisation: expand the currency’s role in foreign trade settlement – it has already overtaken the euro to become the second to the dollar – encourage its use in cross-border investment, and develop offshore renminbi centres.

https://globalconnections.hsbc.com/us/en/articles/renminbi-worlds-next-reserve-currency